Why do trade imbalances matter? Martin Wolf explains | FT Comment

Why do huge external imbalances herald disaster? Martin Wolf, the FT's chief economics commentator, explains what happens when some countries spend much less than their incomes and so run big current account surpluses, while others do the opposite.

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[davecorsi]

Short, sweet and to the point. Since there is a "consensus" among the experts that trade deficits do matter, it is refreshing and accurate to hear someone take the contrarian view which is the correct one by the way.

[BioHazardCL]

Oh dear. So the UK should try to prevent a trade deficit because it can lead to an economic recession? It's all very complicated

[alexnewmon]

Does the American deficit and currency inflation come from trade imbalance and wealth transfer between nations, or does it come from the federal banking system loaning to our treasury with

[bujanginin]

Trade deficit benefit the country as long as the currency is strong people buy cheap quality products and also can invest in overseas market than earn back some incomes...so not bad situation for country with deficit and less debts..

[anthonywillis]

So countries are indeed tied to each other or subservient to the bigger players namely USA and China!